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CIPS > L4M2 - Defining Business Needs > Flashcards

L4M2 - Defining Business Needs Flashcards

1
Q

What is a liability?

A

Being legally responsible for something

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2
Q

What is a business case?

A

A justification for a proposed project or undertaking on the basis of its investment and cost implications balanced against its expected benefits

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3
Q

What are corporate goals?

A

The targets set by an organisation or company that will achieve the organisation’s mission or objectives.

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4
Q

What is a straight rebuy?

A

Straightforward repurchase of an item bought previously, rather than considering an alternative.
Straight rebuys are often a call off from an existing contract or framework agreement

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5
Q

What is a modified rebuy?

A

A product/service that has been sourced before but requires a slight change prior to being rebought.

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6
Q

What is a new purchase?

A

The purchase of an item for the first time.

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7
Q

What are some examples of a straight rebuy?

A

MRO items - routine items that are used for the running of an organisation e.g spare parts for machines
Stationary Items
Raw materials such as steel and bulk chemicals

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8
Q

How risky is a straight rebuy?

A

Low risk as there are usually alternative suppliers and cost of switching is low.

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9
Q

What are some examples of a modified rebuy?

A

A buyer sets a cost reduction target for the year and so attempts to get the same item for a lower price from the same supplier
A buyer reviews the number of suppliers it has and finds that it has multiples uppliers for the same product - the buyer chooses one supplier and renegotiates terms to get volume discount
A change in regulations means that a product has to be modified so component specification must change

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10
Q

What is an approved supplier?

A

A list of approved suppliers who have the skills to undertake the work.

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11
Q

What is a call off?

A

The purchase of an item using a framework agreement that has already been through a procurement process

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12
Q

What is a framework agreement?

A

An arrangement that is put in place with one or more suppliers for the supply of a range of goods or services in which the prices and terms are all agreed for the duration of the agreement.

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13
Q

What is a volume discount?

A

A reduction in the usual price when a minimum quantity is ordered (bulk discount)

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14
Q

What are some examples of new purchases?

A

A new product is added to an organisation’s offer, that uses materials or components not sourced before
Changes to legislation which mean a public sector department has to offer a new service that requires skills and experience not otherwise required
Technology changes and new equipment is needed

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15
Q

What is the critical path?

A

The sequence of steps in a project that together determine the shortest time to complete the project

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16
Q

What is a business requirement?

A

The activities that meet the need of and provide value to the business

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17
Q

What is a specification?

A

A detailed description of the product or service required

18
Q

What is the supply market?

A

The marketplace in which suppliers conduct business

19
Q

What are key suppliers?

A

Externally located suppliers who are essential to the successful delivery of a business’ objectives

20
Q

What is an invitation to tender?

A

A formal invitation sent to suppliers inviting them to make an offer to supply goods or services

21
Q

What are regulatory bodies?

A

Public authorities or government agencies that have responsibility for overseeing and supervising a specified activity.

22
Q

What is capacity?

A

The measure of the rate at which the operations function can transform its inputs into a quantity of product or service outputs in a given timescale

23
Q

What is a method to identify business needs?

A

RAQSCI

24
Q

What are the 6 themes of RAQSCI in order?

A
  1. Regulatory
  2. Assurance of supply
  3. Quality
  4. Service requirements
  5. Cost
    6.Innovation
25
Q

What are target costs?

A

The expected costs of making a product or service

26
Q

What are whole-life costs?

A

An estimate used to help determine the end-to-end cost of providing a service, manufacturing, or procuring a product.

27
Q

What are benchmarked prices?

A

Comparing an element of one business such as price, quality or service, against another

28
Q

What is continuous improvement?

A

An ongoing effort to improve products, processes and services

29
Q

Why is the order of the RAQSCI model crucial?

A

It focuses attention on potential trade-offs that may have to be made.

30
Q

What is a key point to remember when defining business requirements?

A

Remembering to involve a range of stakeholders within the organisation allows procurement professionals to take into account the different stakeholders’ conflicting needs and to agree in advance on any compromises that must be met.

31
Q

What are the business needs used for?

A

Business needs are useful as they inform a range of procurement activities including:
Defining evaluation criteria
Testing the available options to ensure that they satisfy the company’s needs
Developing performance measures
Re-evaluating your sourcing strategy if circumstances change

32
Q

What is a sourcing strategy?

A

A plan for creating an advantage by continually reviewing current needs against purchasing opportunities

33
Q

What is meant by regulatory in the RAQSCI model?

A

The need to cover any legal requirement or requirements of regulatory bodies

34
Q

What is meant by assurance of supply in the RAQSCI model?

A

This covers the continuing supply of goods and services when required and is based on factors such as capacity, financial stability and risk

35
Q

What is meant by quality in the RAQSCI model?

A

This is the consistency, repeatability and how fit for purpose the procured goods are

36
Q

What is meant by service requirements in the RAQSCI model?`

A

These are factors associated with the way services are supplied, for example, flexibility and availability

37
Q

What is meant by costs in the RAQSCI model?

A

It is only after the other factors have been met that cost should be considered, in aspects of both cost and price

38
Q

What is meant by innovation in the RAQSCI model?

A

It is necessary to look for innovation, particularly in terms of the means of improving the customers’ experience. An example is the use of emerging technology.

39
Q

What should be considered when defining business requirements?

A

Collect information relating to the organisation’s desired future state
Categorise all potential stakeholders
Identify individuals who contribute tot he acquisition, manufacture or use of the product.
On completion, the analysis should be shared with all shareholders

40
Q

On completion, analysis

A

CIPS (2 decks)

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